Latest news with #marketdislocation
Reuters
3 days ago
- Business
- Reuters
Hedge funds lifted by stocks, stymied by bonds in May, say sources
LONDON, June 3 (Reuters) - Hedge funds made gains in May on a weaker dollar and by exploiting market dislocations following April's global trade shock but faced losses in whipsawed commodities and fixed income markets, according to sources and bank research. Stocks bounced back last month as tariff worries ebbed while bond markets sold off as worries about high debt levels in big economies such as the United States and Japan resurfaced. Hedge funds globally returned a positive monthly return of 3% as of May 29, a JPMorgan prime brokerage note sent to clients on Friday and seen by Reuters on Monday showed. Industry returns were up 5% for the year so far, the note said. Stock picking hedge funds posted a 3% performance in May, while multi-strategy hedge funds trading many different strategies under one roof returned 2.5% and quantitative equity funds using systematic strategies returned 4.2%, the note said. Singapore's $1.1 billion multi-strategy hedge fund Arrowpoint Investment Partners benefited from exploiting markets roiled by tariff shocks and sees more arbitrage opportunities ahead, its chief investment officer told Reuters. Billionaire investor Cliff Asness's $135 billion hedge fund AQR Capital Management saw gains from stock selection and corporate arbitrage in its Apex Strategy, which returned a 2.4% May return net of fees, said a source. Systematic and trend following programmes that traded in stock markets were helped by their stock holdings. AQR's Helix Strategy, which follows market trends, was flat in May but has delivered a 7% return for 2025 through the end of May, as positive returns from stocks were offset by reversals across interest rate derivatives and trades which play differences across different bond tenors, said the source. London-listed Man Group's (EMG.L), opens new tab AHL Alpha fund returned a negative 2.19% for May and is down around 11% while its multi-strat fund had a positive May and has returned around 5% so far this year, said the fund's website. Systematic funds, which have limits on how much volatility their fund can tolerate have in recent months had to ditch trades, both losing and winning, even when the uncertainty roiling markets has been temporary, said an article written by portfolio managers at Man Group's AHL strategy in April.
Reuters
4 days ago
- Business
- Reuters
Singapore hedge fund Arrowpoint capitalised on May market turmoil
HONG KONG, June 3 (Reuters) - Singapore's multi-strategy hedge fund Arrowpoint Investment Partners has made gains by exploiting market dislocations triggered by global trade tariff shocks and sees more arbitrage opportunities ahead, its chief investment officer said. Since mid-April, the $1.1 billion fund has capitalised on extreme dislocations in equities, currencies and bond curves, founder and CIO Jonathan Xiong told Reuters. May was the fund's best month since its launch last July, up more than 3%, said a person familiar with the matter who declined to be identified. By comparison, multi-strategy hedge funds were on average flat in April, data from With Intelligence shows. Backed by Blackstone, the Canada Pension Plan Investment Board and Temasek's Seviora, Arrowpoint was Asia's largest hedge fund startup last year. It now has around 110 staff with over 20 trading pods. "Everything has got more volatile, but there are also opportunities that were so abundantly clear," said Xiong, a former Asia co-CEO of Millennium Management. Arrowpoint exploited dislocations in Asia FX markets using non-deliverable forwards and profited from Australian rate curve anomalies following U.S. President Donald Trump tariff announcements, Xiong said. It was able to take advantage of temporary mispricing in asset prices, betting they would eventually revert to normal levels. "One thing I noticed is that Asia dislocations take much longer to come back as the market is less liquid compared to the U.S.," Xiong said. Arrowpoint, however, stayed clear of Japan's rate markets, where super-long bond yields were driven to record highs in May. "The risk premium injected towards the longer end of the Japan curve may be warranted given investors' repricing of global bond term premiums," he said. At the Sohn Hong Kong Investment Leaders Conference on Friday, Xiong pitched a long China/short Japan 'risk parity' trade, which involves buying China stock index futures and 5-year government bonds, while shorting similar Japanese assets. He said investor interest in Asia-based multi-strategy funds is rising as there's growing concern about over-exposure to U.S. markets.
